The term leadership can be defined (Bass 1985) as the social influence whereby one person influences the support and help/aid of other people in accomplishing a common goal. There are various styles of leadership which have different impacts in a company. There are various styles of leadership. One of them is the autocratic or the authoritarian leader.


The autocratic leader is the overall leader and does not tolerate suggestions from subordinates. He/she makes all the decisions without discussing with the subordinates. In this style of leadership, power is centralized to this figure of the leader. The leader makes the decisions and keeps them to himself/herself until he/she feels that it is necessary to inform the others (Burns1978). This style of leadership is good in cases where quick decisions are required as the leader will make the decision all by his/her own.

Another style of leadership is the democratic or the participative style. As a democratic leader you give the employees a room to air their views and contribute significantly in decision making. By this, the leader can be compared to the captain of a football club while the rest of the employees are the members of the team. Team playing in the participative style of leadership is important, as the title suggests, every employee has to participate as every action of the employee are important. This type of a leader is a good listener, collaborator and influencer.

The important thing about this style of leadership is that the leader is able to win cooperation of his/her employees and this makes all the employees important stakeholders in the company. Through this type of leadership, employees are motivated effectively and efficiently. Employees are focused and feel important at workplace.

The other type of leadership is the laissez faire or free rein type. In this type of leadership makes the leader leaves his employees by themselves. The leader does not lead any more. This implies that, the subordinates are left to make their own decisions. They are given maximum freedom to do whatever they wish to do.  This style of leadership is applicable in a workplace where the employees are highly motivated and with special characteristics of team alignment with the same level of expertise and experience.

According to Goleman in his book, 'Primal Leadership', (2002) there are some more styles of leadership. These include the visionary leader; this type of a leader is inspired and believes in his visions. He possesses empathy. This type of a leader believes that an employee's dream can be achieved.

There is also the coaching type of leadership. A coaching leader is able to help an employee identify his or her strengths and weaknesses. He or she is a counselor. He assists an employee to connect the goals of a company and what an employee want. This type of a leader is able to motivate his employees.

There is also the affiliative type of leadership. This type of leader builds harmony within the workplace. He is empathetic. This leader is friendly to his employees and is therefore able to create that bonding that enables the harmony. This type of a leader is able to resolve conflicts and create a moral environment within the workplace.

What style of leadership did Hiroshu Okuda portray?

The former giant car manufacturer's boss, Hiroshu Okuda, can be categorized as a democratic because of his ability to promote a number of employees in the managerial level with exemplary performance at a go. This implies that he recognizes the input of his employees. If he is able to recognize the ability of his employees, it is possible that he indulges them in important decision making in the running of the company.

Mr. Okuda was able to revamp from the traditional promotion of employees as per their seniority, meaning that he is able to acknowledge the input of the even lowly ranked employees.  He is participative as he was able to discuss with the designers and come up with a plan that would see the process of manufacturing a new car, which is from the concept to the market, become faster, reducing the timeframe from 27 months to 18 months.  Mr. Okuda is against the traditional bureaucratic system of government that takes along time which is expensive to a company in decision making.   

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Mr. Okuda style of leadership is versatile though, he is also a visionary leader. He thought differently from the other leaders in Toyota. Toyota wanted to venture in Taiwan and invest on a plant. His colleagues opposed the idea because of the long list of demands put forth by the Taiwanese government that were not very favorable to the company. Mr. Okuda felt that this project would be very profitable to Toyota at the end.  Mr. Okuda was able to overcome all the obstacles that lay ahead of him and the Taiwan plant became a significant asset to the Toyota Company.  Through his strategic actions and measures that he took, he was able to obtain his vision. Its profitability earned Mr. Okuda respect and was able to rise in the Toyota hierarchy.


A transactional leader is a type of a leader who is focused on creating an interaction with his employees which is based on exchange of benefits. They believe that wages and punishment are the benefits a subordinate should get according to how one does his or her work. They believe that wages motivate employees to obtain the desired goal. (Burns 1978)

They also believe that employees that those employees that do not obtain the goals should be punished. These leaders therefore, clearly give instructions to their employees and also state their fate- wage or punishment- as per their performance. A transactional leader will allocate work even though there are minimal or no resources.

What differences are there between a transactional leader and a transformational leader?

A transformational leader is different from a transactional leader. As the word transform mean-to positively and valuably change- a transformational leader works on motivating his employees, enhancing their morale and their overall performance. The transformational leaders have an aggregate objective of seeing that their employees are leaders. (Burns 1978)

The leader therefore helps an employee know his or her identity and that of the company and at the end of it get the connection between the two. He or she will also help an employee identify his or her strengths and weaknesses. The leader will set a good example to his or her employees and will therefore become a good role model for the employees to emulate.

A transformational type of leadership is said to improve individual people's life as well as the status of a company. An employee under a transformation leader can realize his or her full potential and so the organization. Unlike the transactional type of leadership where is about 'giving and taking', a transformational leader will work on unleashing the whole potential of an employee.

An employee under transactional leadership feels insecure in the aspect of getting the wrath of a punishment in the event that a desired goal is not realized. Punishment never works as a motivation. Rather, it is used as a humiliation tool that suppresses employees to obtain the desired objective. Unlike transactional leadership, an employee under a transformational leader is motivated. As stated earlier, the leader helps an employee to identify his or her weakness as well as strengths. The leader will as well help the employee work on his weaknesses and transform them to strengths. In the meantime, the leader will assign duties to the employee as per his or her weaknesses. Therefore, this employee will never feel insecure of a punishment and to top it up, the employee is comfortable with the assignments he or she is undertaking.

Another great difference between the two types of leadership is that in the transactional leadership, direct and clear instructions are given by the leader. This leaves no room for adjustment convenient to the employee to achieve the target. On the other hand, a transformational leader encourages the employee to invent new ways to handle a certain challenge. This boosts the morale of the employee to the extent that he or she will work extra hard to come up with inventions which is a benefit to the company.

Hiroshi Okuda exhibits transformational leadership. Hiroshi Okuda is tired with the bureaucratic system of governance that does not realize the importance of employees in decision making. He targets working with the employees so as to motivate them and also get them exposed to new inventions. Mr. Okuda works with the designers to come up with a shorter timeframe for coming up with a new vehicle into the market. The bureaucratic system would probably not accept any advice from its employee. Transformational leadership is about new challenges; this is what Okuda did with the Taiwan plant. This seemed to be a dangerous venture which Okuda was willing to undertake with his employees.

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